As an investor, you need to adopt a Yin Yang Investor Mindset. In other words, always recognize that whenever one asset class is booming, another asset class may be suffering. If you feel like you missed the boat with one investment, just know there’s another boat somewhere in the world waiting.
My investment mindset as a retiree since 2012 has always been to protect principal first. Losing principal when you no longer have a day job is a terrible thing. But at the same time, back then I felt we were in the middle of a potentially strong recovery so I had to invest in equities.
The solution: I invested in plain vanilla S&P 500 and Dow Jones structured notes with downside protection. In return, I’d forego some or all of the annual dividend.
Unlike some retirees, I wasn’t focused on generating income from my investments because I had enough to live on largely through rental income and a growing online business. In a bull market, you want to invest in principal growth to maximize returns. But now, I’ve slowed down my additional equity investments and am now focused on bonds because they are finally selling off.